South Africa’s Mining Sector Records Strong Rebound in February
South Africa’s mining industry has shown robust growth in February, bouncing back from a challenging start to the year, according to the latest data released by Statistics SA.
The Bureau for Economic Research’s (BER) Weekly Review highlighted that mining activity exceeded expectations, with production surging by 9.9% year-on-year (y-o-y).
This represents the most significant growth in mining output since mid-2021, surpassing market forecasts of a 3.5% y-o-y expansion.
Iron ore production led the way, increasing by 42.9% y-o-y and contributing 5.1 percentage points to the overall growth. Coal production also made a substantial contribution, rising by 14.6% y-o-y.
Additionally, seasonally adjusted mining production saw a 5% month-on-month (m-o-m) increase in February, following a revised 0.4% decline in January.
In addition to the positive performance in the mining sector, South Africa saw encouraging growth in manufacturing production. Output expanded by 4.1% y-o-y in February, marking the fastest pace of growth since June 2023.
Notably, wood, paper, and paper products recorded the largest positive contribution, rising by 14.9% y-o-y. However, the production of vehicle parts and accessories declined by 16.5%, exerting downward pressure on overall output. Factory production also experienced a 0.3% m-o-m decline compared to January.
Looking ahead, the BER noted that March would determine whether the manufacturing sector contributes positively or negatively to GDP growth in the first quarter. Nevertheless, the mining sector is expected to continue making a positive contribution to economic growth.
Furthermore, the South African Reserve Bank reported an increase in gross gold and foreign exchange reserves to $62.3 billion in March, up from $61.7 billion in the previous month.
The rise in gold reserves, reaching $8.9 billion, reflected an 8.9% monthly increase in the gold price. However, foreign exchange reserves declined slightly to $47.2 billion from $47.3 billion.
The strong performance of the mining sector, coupled with improvements in manufacturing production and steady reserves, signals a positive outlook for South Africa’s economy as it navigates through recovery and growth.
